THAI shares may return to the SET for trading next year

Among the interesting issues presented to the Cabinet were capital restructuring, debt-to-equity conversion and the allocation of newly-issued ordinary shares to existing shareholders, government spokesperson Anucha Burapachaisri said.

Thai Airways Plc will proceed with the following:

1. The exercise of their right by THAI's long-term lenders to purchase newly-issued common shares in the same amount as the new outstanding debt, or the option to pay for the newly-issued common shares by converting the existing outstanding debt (under the business rehabilitation plan) to 4.91 billion newly-issued common shares at 2.5452 baht per share.

2. Conversion of debt into newly-issued common shares in order to fully repay 12.83 billion baht in outstanding debt to the Finance Ministry with 5.04 billion shares at 2.5452 baht per share.

3. Conversion of debt into newly-issued common shares to repay outstanding debt due to various creditors, such as financial institutions who are entitled to receive proceeds from the sale of aircraft; unsecured financial institutions creditors; and bondholders equivalent to 24.50% of the outstanding debt (totalling 25 billion baht) with 9.822 billion shares at 2.5452 baht per share.

4. The exercise of the right to convert the new portion of the loan interest owed to various creditors totalling 4.84 billion baht to 1.9 billion newly-issued common shares at 2.5452 baht per share.

5. Preferential public offering (PPO) of 9.82 billion shares at not less than 2.5452 baht per share.

Thai Airways International Plc will convert debt into equity and offer new PPO shares during the second quarter of 2024. This would result in shareholders' equity of 28.68 billion, which would enable trading of THAI shares on the SET in the fourth quarter of 2024, Anucha said.

Meanwhile, to improve the fleet efficiency of Thai Airways International Plc and Thai Smile Airways, the Cabinet acknowledged that there are currently 64 aircraft in operation. Thai Airways International Plc has applied for permission to lease 13 additional aircraft next year and procure nine aircraft in accordance with the aircraft procurement plan for 2025-26, he said.

THAI is still considered a national airline with 83.93% of the shares held by Thai nationals. This an appropriate shareholding for designation as a national airline to support the implementation of important missions that are in the interest of the nation.

This includes being able to rejoin committees such as the Flight Entry and Exit Time Allocation Committee, which is made up of government representatives to regularly consider air transport agreements with foreign governments.

As for debt repayment to the Government Savings Bank and Krungthai Bank, THAI has deposited the THAI Employees' Pension Fund account to offset outstanding debts owed to those banks.

THAI reported 97.51 billion baht in revenue in 2022, up 341% over the same period of 2021, due to higher revenue from hauling passengers, cargoes, parcels. The airline reported operating profit of 11.21 billion baht. However, the consolidated financial statement still showed a net loss of 252 million baht due to an operational loss of 4.25 billion baht suffered by subsidiary Thai Smile. The figures were still better than the finanacial projection of the business rehabilitation plan, he said.

The airline reported revenue of 32.11 billion baht in the first quarter of 2023 from passenger transportation. The average passenger load factor of Thai Airways and Thai Smile Airways was 84% and 79.7%, respectively. The total passenger traffic was 2.19 million and 1.33 million, respectively.

Revenue is expected to grow, especially after the easing of the Covid-19 situation and the reopening of Thailand and various foreign countries, Anucha said.

The progress in the implementation of the business rehabilitation plan enabled the reduction of operating costs and increased revenue by 64.4 billion baht per year, better than the target of 58 billion baht per year, the airline's data showed .

The company's cash balance as of May 2 was 45.99 billion baht.